CO2 in the Supply Chain: New Tactics to Support Environmental Sustainability

Supply chains consume resources on a large scale, making supply chain decarbonization an enormous priority.

As companies vie for visibility through climate change commitments, the implementation is still fraught with challenges.

What are the new tactics to support environmental sustainability in supply chains and reduce greenhouse gas emissions? There are four key areas in which supply chain leaders must manage operations to drive meaningful change. Read on to learn more.

The team at Trax is dedicated to bringing issues of environmental sustainability in supply chains to the forefront. We have the first-ever emissions tracker for the transportation industry supply chains, empowering businesses to track and reduce their carbon footprint effectively.

Learn more about the Carbon Emissions Manager and the many ways Trax is supporting the goal of global businesses to course-correct environmental impacts in their supply chains.

Scope of Change: 4 Key Areas for Managing Supply Chain Emissions

Four key areas will drive real change in managing supply chain emissions and carbon use:

1. Structures

2. Partners

3. Processes

4. Performance

1. Structures: Corporate Environmental Sustainability Programs

For many global supply chain organizations, course-correcting environmental practices is like turning the Titanic.

That said, the imperative is unavoidable, and even the largest companies in the world have launched corporate environmental sustainability programs. These include comprehensive plans and road mapping efforts that will reach the very structure of how a company operates and ensure phased, effective change.

What does a corporate environmental sustainability program look like on a large scale? Here is an example:

American Electric Power (AEP) has the stated goal of "Achieving America's clean energy objectives requires a transformation of the electric sector." AEP has published ESG disclosures for 15 years and completed a yearlong assessment in 2020, which resulted in a widely used Climate Impact Analysis Report.

Their new carbon emission reduction goals (updated in 2021) are an 80% reduction by 2030 and net-zero by 2050. They have a clearly defined plan and have steadily shifted their structures and operations over the last decade, and will continue to do so for at least a decade more. This has included coal plant retirements, retirement of coal-fueled fleets, providing training for employees in new technology, and supporting communities transitioning into new energy sources.

The structural changes undertaken by AEP have been well-researched, subject to ambitious timelines with the full endorsement of leadership, and rigorously and methodically executed. This is a helpful model to see how even a large company, where revenue relied almost completely on traditional energy consumption, could pivot and embrace environmental sustainability in its supply chain. Of course, structural change has to be carried out in the real world. In the supply chain, this is where supplier engagement comes into play.

2. Partners: Supplier Engagement

Supplier engagement is the second key facet of supporting environmental sustainability in supply chains.

The supply chain is aptly named, and the many links and connections it takes to carry out operations require numerous, coordinating parties. In the conversation around sustainable practices, supplier selection often arises. Supply chain companies committed to reducing carbon emissions will partner with suppliers of like mind.

But there is far more to it than strategic, visionary partnerships. Ongoing engagement and willingness to implement new practices are important. For instance, direct reports of data. Suppliers can easily say they are committed to the cause, but those claims must be backed up with data on their carbon footprint and global emissions generated by standard operations. If a supply chain company is going to show measurable progress in reducing carbon emissions produced, they have to include supplier data, and suppliers have to be willing to report it.

Another component of this is third-party reporting. Any company serious about environmental sustainability in supply chains will likely use impartial researchers and reviewers to regularly monitor operations. Suppliers must be willing to provide information to these reporters and work closely with everyone involved to ensure accurate reporting.

3. Processes

Tracking carbon emissions produced has not always been standard practice in supply chains. But future-minded companies dedicated to making good on corporate pledges must exercise supply chain transparency, which means arduously tracking and monitoring processes.

Data management and analysis are part of any transportation spend management maturity model. Adding new elements by tracking carbon emissions across the supply chain is a step in the right direction, and one that we at Trax have gone above and beyond to support.

Purpose-built for the transportation industry, the Trax Carbon Emissions Manager is the easiest way to get real, detailed, and accurate information on emissions across all modes and geographies.

This is the first-of-its-kind solution that enables logistics services providers, global enterprise shippers, and anyone else in supply chain management to gain visibility into real data and make strategic improvements toward supply chain sustainability. Tap or click here to schedule a consultation and discuss how the Carbon Emissions Manager can work for your company's supply chain.

Tap or click here to schedule a consultation and discuss how the Carbon Emissions Manager can work for your company.

4. Monitoring and Evaluating Performance

No environmental sustainability plan is complete without ongoing monitoring and performance evaluation.

The accountability inherent in public pledges necessitates this, as does an understanding that revenue leaders are unequivocally committed to a greener future. Long-term goals need to be translated into operational short-term goals, all of which must be planned out, monitored, and measured.

In short, the roadmap must be followed, and ongoing agility and adaptation are going to typify the companies that excel in supply chain sustainability efforts, versus those that are left behind.

Tracking Your Carbon Footprint With the Trax Carbon Emissions Manager

Do you have the plan in place and the tools needed to enact real change? Tracking CO2 in the supply chain is mission-critical, and if your efforts toward environmental sustainability in supply chains are going to actualize, you will need support.

That's part of our role. For a better understanding of how everything from emissions tracking to freight audits supports your company's journey toward transportation spend management maturity and supply chain sustainability, reach out to Trax today.